The Surge of Altcoins: Are We on the Brink of Another “Altseason”?

The cryptocurrency landscape is buzzing with news as the altcoin market has seen an impressive surge, adding a staggering $126 billion in market capitalization during Q2 of 2023. This growth has ignited passion among analysts who believe we might be on the cusp of an “altseason,” reminiscent of the explosive bull run experienced in 2017. Crypto analyst Javon Marks has taken note, highlighting various indicators suggesting a significant rally for altcoins in the near future.

Analyzing the Trends: What the Numbers Say

In a recent post on X, Marks shared a compelling chart comparing the TOTAL3 index—representing the total market cap of altcoins excluding Bitcoin (BTC) and Ethereum (ETH)—against the US money supply. This visualization indicates that altcoins are gaining value in relation to the total liquidity circulating in the US economy, which points to heightened investor interest and inflow of capital into altcoins.


According to Marks, altcoins have rebounded off a critical retest level following a breakout. He stated, “Altcoins have bounced off of the breakout retest against the US money supply and can deliver one of their most powerful runs since 2017!”

Echoing this sentiment, another crypto trader known as Moustache also weighed in with an analysis highlighting a weekly inverse head-and-shoulders pattern in the TOTAL3 chart. This analysis draws parallels to the 2021 altcoin season, during which leading altcoins soared by approximately 174%, contrasting sharply with Bitcoin’s more modest 20% increase. Moustache is optimistic, stating that the current chart pattern is a bullish reversal indicator, and foresees “much higher levels” for altcoins ahead.


Diverging Views on the Altseason

While there is a wave of enthusiasm surrounding this potential altcoin rally, not all analysts are convinced. Some, like technical analyst Crypto Scient, remain cautious. They argue that the recent uptick in altcoin market cap does not indicate a long-term bullish trend shift. Crypto Scient noted that the TOTAL2 trend remains bearish after encountering resistance at the $1.25 trillion level. “Since both BTC and TOTAL are near the resistance zone and TOTAL2 still has some room, I am inclined to believe that we are distributing,” they commented.

Another perspective comes from crypto commentator DonaXBT, who stressed the importance of a noticeable breakdown in Bitcoin’s dominance trendline for altcoins to gain traction. Currently, Bitcoin’s dominance stands above 60%, with a continuing weekly uptrend. According to DonaXBT, a move below the 60% threshold, followed by a retest of a support zone between 56% and 58%, could act as a crucial trigger for an altseason to kick in.


Current Trading Activity Points to Recovery

Despite the heightened optimism surrounding altcoins, data from CryptoQuant indicates that spot trading volumes for altcoins have yet to reach peak levels. Currently averaging between $3-$5 billion per day, these figures pale in comparison to the $8-$12 billion per day recorded in Q4 2024. While this may suggest that altcoins are still in the early stages of a price rally, observers view it as a sign of potential growth on the horizon.


Additionally, the Altcoin Season Index is currently positioned at 24, indicating that the market remains in Bitcoin season, according to Blockchaincenter.net. Historically, an index value below 25 signals Bitcoin’s dominance. However, this can serve as a precursor for altcoin growth; when the index climbs above 30 or 40, significant rallies are commonly seen, driven by capital rotation from Bitcoin.

With trading volumes showing signs of an impending recovery and the Altcoin Season Index hinting at a possible shift, optimism is growing within the investor community regarding an impending altcoin rally.

Final Thoughts

As the altcoin market continues to evolve, it’s clear that we’re in a period of significant transition. With experts voicing both optimism and caution, the future of altcoins remains uncertain but filled with potential. The promise of an upcoming altseason could provide lucrative opportunities for investors who are prepared. Yet, as always, it’s essential to conduct thorough research and understand the risks involved in any investment.

For further insights, check our articles on Bitcoin’s market dynamics, Ethereum’s impact on altcoins, and how market indices influence trading strategies.

Disclaimer: This article does not constitute investment advice or recommendations. Every investment and trading move entails risk, and readers should conduct their own research before making decisions.